CTC Media, Inc. Investor Presentation. May 2014

Transcription

1 CTC Media, Inc. Investor Presentation May 2014

2 A Leading Independent Broadcasting and Content Company in Russia

3 From Private TV Network to Public Media Holding CTC Media was founded as Story First Communications Modern Times Group became a shareholder of CTC Media Initial Public Offering on NASDAQ Launch of CTCinternational in USA Launch of CTCinternational in Germany, North America and the Baltics Telcrest Investments Limited acquired a 25% stake in СTС Media from Alfa Group Launch of Domashniy.ru women s portal Development of inhouse creative production center Launch of Peretz International in Belarus Launch of CTC Network Launch of Domashny Network Acquisition of DTV (rebranded to Peretz in 2011) Acquisition of Channel 31 in Kazakhstan and a TV company in Moldova Launch of CTCinternational in Israel Establishment of CTC Media s internal advertising sales house Everest Sales Launch of Videomore.ru online content portal Launch of CTCinternational in Kazakhstan, Kyrgyzstan, Armenia, Georgia, Azerbaijan, Thailand and uplink to HOT BIRD CTC and Domashny received digital licenses Launch of CTC Love Channel on cable and satellite Launch of Peretz International in Kyrgystan Launch of Sweet me brand together with KupiVip 2

4 We Fully Capture the Value Chain by Being Integrated TV Broadcaster CTC target audience All BROADCASTING ( RUSSIA) Domashny target audience Females Peretz target audience All CTC Love target audience All FREE-TO-AIR (CIS) Kazakhstan Channel 31 Moldova СTС Dixi AD SALES Free-to-air Internal TV ad maket advertising growthsales 1 house Everest CTC-INTERNATIONAL (PAY-TV) International version of CTC channel International version of PERETZ channel Ctc.ru, Domashniy.ru, Peretz.ru TRANSMEDIA Online video portal Videomore.ru Mobile, smart TV, second screen, transmedia projects 3

5 Delivering on Strategic Priorities STRATEGIC GOAL: To become a leader in creation, management and distribution of content on all potentially monetizable platforms Prioritize content and synergies Grow combined audience share Expand digital offerings Diversify revenue streams Launched in-house creative production center Centralized content purchases to secure synergies, longer content life span and sharing among platforms Centralized programming to avoid cannibalization Launch of CTC Love to cover a further, complementary audience segment New Head of Domashny upgrades Channel s content and programming Launch of the first e- commerce project by a TV company in Russia Channels' websites became full scale platforms New approach of monetization throw partnerships Digital media revenue up 57% in RUB in Q and continues to grow Increase of merchandising revenue Further steps towards more local content 4

6 Content Strategy Centralized content acquisition and content production function Consolidate acquisition and production in the In-House Creative Production Center Increase buying power and negotiate better terms Maximize control over rights for all platforms Capitalize on management and monetization of rights Centralized programming and technical signal management Create one library Focus on inventory control Manage content utilization for all channels Avoid cannibalization between the channels 5 5

7 Driving Operating Efficiency Create centralized structure with the potential to integrate Avoid multiple divisions and departments; consolidate under the top management Strategy core to CEO responsibility more businesses, channels and platforms Digital integrated with and a continuation of the TV business Take multiplatform approach to content creation and distribution Consolidate all channels digital activities in one division Already centralized marketing, corporate communication, strategic programming and content acquisitions Keep the smart balance between the optimization and growth Focus on developing and retaining young talent Make all operations profitable Significant increase of efficiency: no growth of headcount while growing business and launching new channel 6

8 Combination of Growth, Profitability and Dividend Yield GROWTH + + EFFICIENCY / PROFITABILITY RETURN CASH TO SHAREHOLDERS Operating in Europe s third largest 1 Forecast for Russian TV advertising market to grow at lower end of 5-8% range in 2014, CTC Media Russian advertising revenue in line with the market OIBDA margin of 32.5% in 2013, well above European TV broadcasters average High Group power ratio of 1.5x compared to rivals due to attractive audience profiles 2 Strong cash flow generation and net cash position Over 50% cash dividend payout More than 5% dividend yield in 2011, 2012 and 2013 Current dividend yield >7%, the highest among European media companies Source: (1) Zenith Optimedia, April 2014 estimates (2) Kommersant newspaper, 16 April 2013 (FY 2012 results). Power ratio = national TV ad revenue share / audience share in all 4+ age group. Power ratio demonstrates relative effectiveness of audience monetization. 7

9 We Operate in Attractive Markets Armenia, Georgia, Azerbaijan Russian-speaking population=10.4 mln North America Russian-speaking population = 3.5 million Germany Russian-speaking population = 6 million Baltic states Russian-speaking population = 4 million Moldova Population = 3.6 million 2012 TV Ad Market = US$ 17.1 million* Russia Population = million 2013 TV Ad Market = US$ 4.9 billion* Israel Russian-speaking population = 1.5 million Belarus Russian-speaking population = 7 million Kazakhstan Population = 17.1 million 2012 TV Ad Market = US$ million* Russian-speaking population = 12.3 million Kyrgyzstan Russian-speaking population = 3.6 million Thailand Russian-speaking tourists = 1.3 million (2012) Since February 2012 CTC-International an is available on the HOT BIRDTM 8 satellite (W/E Europe, North Africa, Middle East and Central Asia coverage) Sources: Video International, Russian Association of Communications Agencies, ZenithOptimedia, CIA World Factbook, Rosstat, Russkiy Mir Foundation Note: (*) All TV Ad Markets figures are net of VAT 8

10 We Are the Largest Independent FTA-Broadcaster in Russia with Premium Audiences 26.4 Maintained 2 nd place Combined audience shares, % (all demographic) Q Gazprom-Media СTС Media VGTRK (Rossiya) Channel One National Media Group UTV Russia Holding Gazprom-Media СTС Media VGTRK (Rossiya) Channel One National Media Group UTV Russia Holding 4.1 Q

11 Growing Audience Shares In All Most Commercially Attractive Demographic Audience shares 1, % Q Q Channels broadcasting Olympics were up Channel One TNT CTC Russia 1 NTV Ren TV Channel 5 TV-3 Russia 2 Peretz Pyatniza *** Disney * Russia 24 Domashny TV Centr U ** Zvezda 2X2 Russia K 2 Other (1) Source: TNS Russia, CTC Media s Research Department (2) Includes audience shares of regional and non-fta channels (*) Operated under Semerka brand before 31 December, 2011 (**) Operated under Muz-TV brand before 1 September, 2012 (***) Operated under MTV brand before 1 June,

12 Growth Company Operating in a Dynamic Market

13 Digitalization in Russia Is on Its Way First multiplex Second multiplex Third multiplex More clarity expected by the end of 2014 Currently only Russian cities with more than 100,000 residents are measured by TNS (~50% of the total population of Russia) With full rollout of digital transition Russia will have 98% all-russia penetration, which means almost double the number of audience covered Governmental authorities indicate that estimated payments in 2014 will be approximately $25 million for the CTC and Domashny channels in aggregate, depending on the actual rollout 12

14 US $ bln RUB bln Russian TV Ad Market Has Significant Potential for Further Development Russian TV ad market was #7 in the world and #3 in Europe in and is expected to maintain its position by 2016 Free-to-air TV ad market growth USA Japan China Brazil UK Germany Russia TV Ad Market Total Ad Market Note: All TV Ad Markets figures are net of VAT Sources: (1) Zenith Optimedia, as of April 2014, Company s estimates 13

15 Slovenia Bulgaria Austria USA Belgium UK Germany CEE Average Russia Ukraine Poland Due to Relatively Low Ad Spend as % of GDP and Underleveraged Consumer Ad spend as % of GDP¹ Consumer and mortgage loans as % of GDP % 63% 61% 66% 38% 42% 23% 20% 21% 7% 13% 16% 18% 10% 17% 12% 16% 13% 8% 18% 23% 16% 3% 1% 5% 9% Consumer loans / GDP Mortgages / GDP Sources: (1) ZenithOptimedia, Company s estimates (2) National Central Banks 14

16 TV Is the Most Attractive Advertising Medium in Russia FY 2012 cost per thousand in Russia (US$)² TV is the only medium with truly national reach TV 2,0 Important social and cultural platform More free-to-air networks than in other countries Radio 3,9 High quality free-to-air content offering Internet 5,8 Newspapers 5,6 Magazines 6,3 Ad spend in Russia by media segment 1 (%) FY 2012 TV cost per thousand (US$)² 48% 43% 48% Russia 2,0 30% 31% Central & Eastern Europe 4,1 1% 22% 11% 6% 18% 12% 10% 6% 5% 5% 0.4% 2% 2% Asia Pacific Western Europe North America 16,4 19,8 29,1 TV Internet Press Outdoor Radio Other F Sources: (1) Russian Association of Communication Agencies, Video International (2) Initiative Media 15

17 Minutes per day Internet Is Growing Not at the Expense of TV Usage But in All demographic TV viewership was down 4% TV Usage (Minutes per day, All 16+) * TV Radio Internet Other Source: TNS Gallup Media, Russia * Change in TNS Measurement panel in 2012 increase proportion of 2+ Tv-sets per household 16

18 US $ mln US $ mln We Continue to Deliver Strong Top and Bottom-line Growth % 38% 41% % % % % 32% 32% % % 26% 27% 22% 21% 16% 21% 20% 16% 21% ** 2009** ** 2012** 2013** (Comparable-basis) total operating revenues*** ** 2009** ** 2012** 2013** OIBDA* OIBDA margin*, % Peers average OIBDA margin****,% Notes: (*) OIBDA is defined as operating income before depreciation and amortization (exclusive of amortization of programming and sublicensing rights. OIBDA margin is defined as OIBDA divided by total operating revenues. Both OIBDA and OIBDA margin are non-gaap financial measures (see reconciliations on page 47) (**) 2008 OIBDA and OIBDA margin are adjusted to exclude a $232.7 million charge arising from the impairment of the intangible assets of DTV Group in Russia, Channel 31 in Kazakhstan and a broadcasting group in Moldova; 2009 OIBDA and OIBDA margin are adjusted to exclude an $18.7 million charge arising from the impairment of the broadcasting licenses in Russia and a $28.6 million stock-based compensation expense recognized in conjunction with the previously announced settlement by CTC Media of litigation brought by it against its former CEO; 2011 OIBDA and OIBDA margin are adjusted to exclude a $106.4 million charge arising from the impairment of several regional broadcasting licenses and the Peretz Network goodwill; 2011 OIBDA and OIBDA margin are adjusted to $82.5 million non-recurring charge arising from the impairment of analog broadcasting licenses; 2013 OIBDA and OIBDA margin are adjusted to $29 million charge arising from the impairment of the Company s production unit in the fourth quarter 2013 (see reconciliations on page 45-46) (***) Comparable-basis operating revenues are non-gaap financial measures provided in order to facilitate period-to-period comparisons of CTC Media s results following the implementation of the new model of advertising sales starting from 2011 (see reconciliations on page 47) (****) Following companies are included in European peers average OIBDA margin calculations: CME, TVN, S.A. Modern Times Group, Antena3, ITV plc, Metropole Television, Mediaset, ProSiebenSat, Mediaset Espana, TF1 17

19 and to Diversify Our Lines of Business 71% 15% 10% 2004 Q Sublicensing 0.2% Channel % Digital Media 0.8% CTC- International 0.5% Russian FTA Broadcasting 100% Russian FTA Broadcasting 96% 18

20 Fragmentation of Russian TV Market Presents Opportunity for Niche Channels Growth Audience shares, all demographic 55% 50% Top 3 state-controlled channels 45% 40% Growth due to Olympic games broadcasting 35% 1 st tier channels 30% 25% 2 nd tier channels 20% 15% Non-FTA and regional channels 10% Q Notes: top 3 state-controlled channels: Channel One, Rossiya 1, NTV; 1 st tier channels: CTC, TNT, Ren-TV; 2 nd tier channels: TV-3, Domashny, Peretz, Rossiya K, Channel 5, Rossiya 2, Euronews, Zvezda, Pyatniza, Rossiya 24, Ю, 2x2, TV Center, Disney, RU TV 19

21 Olympic Games 2014 Impact on Russian TV Viewing CTC Media audience share reduction was in line with other channels; Inventory partially compensated by viewership increase during Olympics which is monetized Winter Olympic Games Opening and Closing Ceremonies Audience Shares (all 10-45) 25% Opening Closing 29% 47% 25% 67% 59% Total TV Viewing Change in February vs. January All All F % 1% 1% -6% -5% -6% -7% -9% -9% Impact of Sochi Olympics on channels audience share* 16% 11% 8% 13% Four weeks prior 7-23 February 12% 10% 11% 9% 10% 8% 5% 4% 3.0% 3.2% 2.8% 2.1% Channel 1 Russia 1 TNT CTC NTV Ren TV Domashny Peretz * Top-6 channels in All demographic; Domashny and Peretz in their target demographic 20

22 CTC Improves Its Target Audience Profile in Commercially Attractive Demographic Sources: TNS Russia 21

23 CTC Has a Strong Viewership Position Kitchen Third season (3 March 3 April 2014) 21.9% Ship First season (13 January 24 February 2014) 13.8% Posledniy iz Magikyan Second season (7 April 24 April 2014) 12.4% Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 #3 #4 #2 #3 #3 Audience share in all demographic, % 22

24 Domashny Improves Affinity in Its Target Demographic Sources: TNS Russia 23

25 Domashny Has Been Growing Audience Share Since Its Launch in Foreign series Russian series Domashny is up year-on-year despite Olympics in February due to purposeful restructuring of programming grid Reality & Lifestyle Comedy Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Audience share in women demographic, % 24

26 Peretz Improves Audience Profile In Commercially Attractive Young Adults Demographics Sources: TNS Russia 25

27 Peretz Launched a New Programming Grid Starting from April Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 #12 #11 #10 Audience share in all demographic, % 26 Note:(1) in Peretz target demographic All 25-49

28 Stable Consumer Goods Client Base with Large Multi-National and Local Advertisers Ad spending on CTC Media s Russian channels by category 1Q Q Food and beverages 26% 24% 2 Pharmaceuticals and vitamins 20% 22% 3 Cosmetics and personal care products 14% 17% 4 Other goods 19% 16% 5 Telecoms 5% 7% 6 Retail 3% 4% 7 Auto 4% 3% 8 Appliances 4% 3% 9 Detergents 4% 3% 10 Finance 1% 1% 11 Beer 0% 0% * Vast majority of CTC Media s Russian advertisers are basic consumer goods focused CTC Media s advertisers budgets split: 80% multinationals, 20% local companies 37% of ad revenue** came from top 10 clients in Q Notes: (*) National advertising sales for CTC, Domashny and Peretz Networks (**) Total Russian advertising sales for CTC, Domashny and Peretz Channels 27

29 Developing in Attractive CIS, International and Transmedia Markets

30 US$ mln Strong Market Positions in Kazakhstan Channel 31, Kazakhstan (all 6-54 demographics)* Significant growth in Kazakhstan revenue and OIBDA margin Power ratio up to 1.2x from 1.0x 11.6% 11.2% 11% 12% 15.2% 14.7% 14% 17% 13.2% 18% % 21.8% % % % FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 Target audience share Market share Revenue OIBDA margin 24.3 #3 among Top-10 Kazakh channels and 5% revenue growth, despite audience share decline Q Q Source: (*) TNS Central Asia Channel 1 KTK Channel 31 NTK Astana Kazakhstan Channel 7 Habar Mir Habar 2 Other 29

31 Plus We Continue to Expand Internationally Increasing CTC Media s international brand awareness & value through CTC-international and Peretz-International North America December 2009 Dish May 2011 Time Warner; RMG October 2011 Cablevision Comcast Russian-speaking population 3.5 mln Israel June 2011 Hot; Yes 1.5 mln Germany March 2011 Kartina TV IPTV 6 mln Baltic States October 2011 Viasat Broadcasting 4 mln Kazakhstan February 2012 Digital TV; Icon TV 12.3 mln Europe North Africa Middle East Central Asia February 2012 uplink service HOT BIRDTM Kyrgyzstan April 2012 Europe-Asia cable and satellite network 2.5 mln Armenia Georgia Azerbaijan May 2012 Caucasus cable networks 10.4 mln Thailand July 2012 Thai Media Export cable network Belarus October 2013 Beltelecom (Zala), MTIS, Cosmos-TV cable networks 7 mln Total Russian-speaking population 47.2 mln 30

32 and Enter New Platforms to Be Wherever Our Viewers Are 31

33 Strong and Flexible Financial Position

34 Q Financial Highlights (US$ 000 s except per share data) Three Months Ended March 31, Change in USD in RUB Total operating revenues 195, ,247-5% 10% Total operating expenses (153,103) (138,108) -10% 4% OIBDA 50,649 55,971 11% 28% OIBDA margin 25.9% 30.1% Net income/(loss) attributable to CTC Media, Inc. stockholders 28,588 31,216 9% 27% Diluted earnings per share $0.18 $ % 33

35 Q Balance Sheet and Cash Flow Highlights Consolidated Balance Sheet Highlights Consolidated Cash Flow Highlights (US$ mln) As of December 31, 2013 As of March 31, 2014 (US$ mln) Three months ended March 31, 2013 Three months ended March 31, 2014 Cash and cash equivalents Short-term investments Total assets including goodwill including broadcasting licenses including programming rights Working capital Stockholders equity Net cash position Cash at beginning of period Net cash provided by operating activities including acquisition of progr. and sublic. rights (109.0) (84.7) Net cash used in investing activities (1.4) 3.5 including CapEx (1.1) (1.0) including receipts from/(investments in) deposits (0.3) (4.5) Net cash used in financing activities (24.9) (27.4) Cash at end of period CapEx (1.1) (1.0) CapEx as % of total revenue 0.6% 0.5% Free cash flow Notes: (1) Working capital = current assets - current liabilities (2) Net cash position = cash and cash equivalents + short-term investments - total debt (3) Free cash flow = cash flow from operating activities - acquisitions of property and equipment and intangible assets 34

36 US$ mln High Levels of Cash Conversion and Return on Capital Employed % of OIBDA Converted to Operating Cash Flow Return on Capital Employed* % 72% 66% 63% 62% 69% 47% % 33% 27% 27% 27% 29% average ROCE: 30% 32% Operating Cash Flow % of OIBDA converted Note: (*) ROCE excludes one-off non-cash asset impairment charges recognized in 2008, 2009, 2011, 2012 and

37 Strong Management Team Yuliana Slashcheva Chief Executive Officer Joined CTC Media in years in high growth media related businesses Vast executive experience Experience in creating and managing digital development projects Nikolay Surikov Chief Financial Officer Joined CTC Media in 2012 Almost 20 years experience in finance Previously with Ernst & Young, VTB and MTS Viacheslav Murugov Chief Content Officer Joined CTC Media in 2005 Over 15 years in media industry Acclaimed producer of numerous award winning TV shows Lilia Omasheva Chief of Operational Efficiency and Organizational Development Joined CTC Media in years experience in advertising industry Sergey Petrov Chief Broadcasting Officer Joined CTC Media in years experience in TV industry Julia Moskvitina Chief Commercial Officer Joined CTC Media in years experience in advertising sales 36

38 CTC Media Shareholder Structure CTC Media, Inc. Number of common shares outstanding (as of April 30, 2014) 155,762,166 39% 25% 36% Modern Times Group MTG AB Telcrest Investments Limited Free float Shareholder of CTC Media since 2002 Shareholder of CTC Media since 2011 IPO on NASDAQ in June 2006 Independent Directors Lorenzo Grabau Co-Chairman Angelo Codignoni Co-Chairman Tamjid Basunia Director Board of Directors Irina Gofman Director Alexander Pentya Director Werner Klatten Director Jørgen Madsen Lindemann Director Timur Weinstein Director Jean-Pierre Morel Director 37

39 Appendix

40 Audience Shares In All 4+ Demographic Audience shares 1, % Q Q Channel One Russia 1 NTV TNT CTC Channel 5 Ren TV TV Centr Russia 2 TV-3 Domashny Zvezda Russia 24 Peretz Disney * Russia K Pyatniza *** U ** 2X2 Other 2 (1) Source: TNS Russia, CTC Media s Research Department (2) Includes audience shares of regional and non-fta channels (*) Operated under Semerka brand before 31 December, 2011 (**) Operated under Muz-TV brand before 1 September, 2012 (***) Operated under MTV brand before 1 June,

41 Consistent Growth in Technical Penetration Technical Penetration 1, % 87% 88% 91% 94% 95% 95% 95% 65% 71% 76% 82% 85% 89% 90% 54% 61% 68% 73% 80% 84% 85% Note: (1) Technical penetration means the percentage of the population that has the technical ability to receive a particular broadcast signal. Measured annually by TNS Gallup Media in cities with populations of more than 100,000 40

42 Advertising Sales Structure since 2011 Advertisers Advertising Agencies Internal Sales Houses External Sales Houses Everest Sales RTR-Media Gazprom-Media / Alkasar Video International Consultancy services 41

43 Operating Expenses as % of total operating expenses as % of total operating revenues Depreciation & amortization Stock-based compensation 6% 6% 1% 7% 8% 27% 30% 4% 1% 6% 4% 6% 21% 22% Direct operating expenses SG&A expenses 59% 57% 47% 42% -1% -1% Programming expenses Q Q Q Q $153.1 mln $138.1 mln $186.3 mln $195.3 mln 42

44 FY 2013 Income Statement Highlights (US$ 000 s except per share data) Twelve Months Ended December 31, Change in USD in RUB Total operating revenues 804, ,103 3% 7% Total operating expenses (655,059) (624,404) -5% -2% Total operating expenses before nonrecurring items (572,556) (594,535) 4% 7% OIBDA 173, ,815 nm nm OIBDA margin 21.6% 28.9% Adjusted OIBDA 256, ,684 6% 10% Adjusted OIBDA margin 31.9% 32.5% 0.6pp Net income/(loss) attributable to CTC Media, Inc. stockholders 93, ,340 nm nm Diluted earnings per share $0.59 $0.97 nm Adjusted Net income/(loss) attributable to CTC Media, Inc. stockholders 157, ,209 15% 19% Adjusted Diluted earnings per share $1.00 $ % 43

45 FY 2013 Balance Sheet and Cash Flow Highlights Consolidated Balance Sheet Highlights Consolidated Cash Flow Highlights (US$ mln) As of December 31, 2012 As of December 31, 2013 (US$ mln) Twelve months ended December 31, 2012 Twelve months ended December 31, 2013 Cash and cash equivalents Short-term investments Total assets including goodwill including broadcasting licenses including programming rights Working capital Total debt (bank overdraft and loans) Stockholders equity Net cash position Cash at beginning of period Net cash provided by operating activities including acquisition of progr. and sublic. rights (364.2) (378.0) Net cash used in investing activities (26.5) (63.4) including acquisition of businesses (4.0) (0.5) including CapEx (15.6) (6.3) including receipts from/(investments in) deposits (6.8) (56.6) Net cash used in financing activities (88.9) (143.9) Cash at end of period CapEx (15.6) (6.3) CapEx as % of total revenue 1.9% 0.8% Free cash flow Notes: (1) Working capital = current assets - current liabilities (2) Net cash position = cash and cash equivalents + short-term investments - total debt (3) Free cash flow = cash flow from operating activities - acquisitions of property and equipment and intangible assets 44

46 Reconciliation of Non-GAAP Measures Reconciliation of consolidated adjusted OIBDA and other adjusted financial measures to consolidated OIBDA and other corresponding GAAP financial measures (US$ 000 s except per share data) Twelve Months Ended December 31, 2013 OIBDA Total operating expenses Operating income Income before income tax and noncontrolling interest Income tax expense Net income Fully diluted earnings per share Adjusted non-us GAAP results $270,684 ($594,535) $237,568 $251,365 ($61,335) $152,340 $0.97 Impact of impairment loss (29,869) (29,869) (29,869) (29,869) Results as reported (under US GAAP, except for OIBDA which is a non-us GAAP financial measure) $240,815 (624,404) 207, ,496 (61,335) 152,340 $0.97 (US$ 000 s except per share data) OIBDA Total operating expenses Operating income Income before income tax and noncontrolling interest Income tax expense Net income Fully diluted earnings per share Twelve Months Ended December 31, 2012 Adjusted non-us GAAP results $256,408 ($572,556) $232,390 $247,192 ($48,373) $159,065 $1.01 Impact of impairment loss (82,503) (82,503) (82,503) (82,503) (16,500) (66,002) (0.43) Results as reported (under US GAAP, except for OIBDA which is a non-us GAAP financial measure) $173,905 ($655,059) $149,887 $164,689 ($64,873) $93,063 $

47 Reconciliation of Non-GAAP Measures Reconciliation of consolidated adjusted OIBDA and other adjusted financial measures to consolidated OIBDA and other corresponding GAAP financial measures (US$ 000 s except per share data) Twelve months ended December 31, 2011 OIBDA Total operating expenses Operating income (loss) Income (loss) before income tax and noncontrolling interest Income tax expense Net income (loss) Fully diluted earnings per share Adjusted non-us GAAP results $246,716 ($537,293) $ 229,067 $ 243,301 ($83,342) $ 152,561 $ 0.97 Impact of impairment loss (106,382) (106,382) (106,382) (106,382) 6,939 (99,443) (0.63) Results as reported (under US GAAP, except for OIBDA which is a non-us GAAP financial measure) $140,334 ($643,675) $ 122,685 $ 136,919 ($76,403) $ 53,118 $ 0.34 Twelve months ended December 31, 2009 Adjusted non-us GAAP results $87,382 ($96,460) $84,047 $87,585 ($20,759) $64,466 $0.41 Impact of non-cash intangible asset impairment charge (18,739) (18,739) (18,739) (18,739) 3,748 (14,991) (0.10) Impact of Stock-based compensation expense related to settlement of litigation against former executive (28,588) (28,588) (28,588) (28,588) - (28,588) (0.18) Results as reported (under US GAAP, except for OIBDA, which is a non-gaap financial measure) $163,929 ($353,638) $152,475 $148,645 ($45,626) $100,389 $0.64 Twelve months ended December 31, 2008 Adjusted non-us GAAP results $280,241 ($94,636) $92,712 $74,266 ($1,653) $64,635 $1.11 Impact of non-cash impairment of intangible assets of DTV, Kz and Moldova (232,683) (232,683) (232,683) (232,683) 30,331 (153,679) (0.97) Results as reported (under US GAAP, except for OIBDA) $47,558 ($327,319) ($139,971) ($158,417) $28,678 ($89,044) $

48 Reconciliation of Non-GAAP Measures (continued) Reconciliation of consolidated OIBDA to consolidated operating income USD mln Q Q FY 2013 FY 2012 FY 2011 FY 2010 FY 2009 FY 2008 FY 2007 FY 2006 FY 2005 FY 2004 Operating income (loss) 48,139 42, , , , , ,475 34, , ,313 90,187 62,559 Add: depreciation and amortization 7,832 8,465 33,116 24,018 17,649 13,736 11,454 13,379 27,361 19,651 13,920 7,962 OIBDA 55,971 50, , , , , ,929 47, , , ,107 70,521 Reconciliation of consolidated OIBDA margin to consolidated operating income margin USD mln Q Q FY 2013 FY 2012 FY 2011 FY 2010 FY 2009 FY 2008 FY 2007 FY 2006 FY 2005 FY 2004 Operating margin 25.8% 21.6% 25.0% 18.6% 16.0% 34.4% 30.1% 5.3% 40.9% 41.6% 38.0% 40.2% Add: depreciation and amortization as 4.3% 4.3% 4.0% 3.0% 2.3% 2.3% 2.3% 2.1% 5.8% 5.3% 5.8% 5.1% percentage of revenue OIBDA margin 30.1% 25.9% 28.9% 21.6% 18.3% 36.7% 32.4% 7.4% 46.7% 46.9% 43.8% 45.3% Reconciliation of comparable-basis, non-gaap total operating revenues to total operating revenues USD mln Comparable-basis total operating revenues 180, , , , , , ,418 Agency commission fees payable to Video International in connection with Russian advertising sales (25,072) (35,875) (56,257) (60,087) (89,458) (67,994) (79,133) (excluding commissions for regional advertising sales to local clients) Total operating revenues 155, , , , , , ,285 47

49 Contact Information and Disclaimer For further information please visit or contact: Irina Faritova Head of Investor Relations Tel: +7 (495) DISCLAIMER The information contained in this presentation, including market data that are attributed to specific sources and have not been independently verified. No representation, warranty or undertaking, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or the opinions contained herein. None of the Company or any of its affiliates, advisors or representatives shall have any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of this presentation or its contents or otherwise arising in connection with the presentation. The presentation is not an offer of securities for sale in the United States. Neither the presentation nor any copy of it may be taken or transmitted into or distributed in the United States of America or to any U.S. person within the meaning of Regulation S under the United States Securities Act of 1933, as amended (the Securities Act ). This presentation is not a public offer or advertisement of securities in the Russian Federation, and is not an offer, or an invitation to make offers, to purchase any securities in the Russian Federation. Certain statements in this presentation that are not based on historical information are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of Such forward-looking statements include, among others, Russian advertising market growth, roll-out of digital broadcasting in Russia by 2018, growth of Russian TV ad market by 2020 and etc. These statements reflect the Company's current expectations concerning future results and events. These forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of CTC Media to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The potential risks and uncertainties that could cause actual future results to differ from those expressed by forward-looking statements include, among others, changes in the size of the Russian television advertising market; the roll-out of digital broadcasting in Russia; depreciation of the value of the Russian ruble compared to the US dollar; geopolitical events involving Russia and the other countries in which the Company operates, including any potential negative economic impact of such events; the Company s ability to deliver audience share, particularly in primetime, to its advertisers; free-to-air television remaining a significant advertising forum in Russia; and restrictions on foreign involvement in the Russian television business. These and other risks are described in the "Risk Factors" section of CTC Media's annual report on Form 10-K filed with the SEC on March 6, Other unknown or unpredictable factors could have material adverse effects on CTC Media's future results, performance or achievements. In light of these risks, uncertainties, assumptions and factors, the forward-looking events discussed herein may not occur. You are cautioned not to place undue reliance on these forward-looking statements. CTC Media does not undertake any obligation to publicly update or revise any forward-looking statements because of new information, future events or otherwise. 48